PRINTER'S NO. 3227
No. 2469 Session of 1980
INTRODUCED BY ALDEN, SPITZ, KANUCK, E. Z. TAYLOR, PRATT, REED,
POTT, BROWN AND ZORD, APRIL 21, 1980
REFERRED TO COMMITTEE ON FINANCE, APRIL 21, 1980
AN ACT
1 Imposing spending limitations on the Commonwealth and its
2 political subdivisions.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Spending limitations.
6 (a) Total spending by the Commonwealth shall not exceed the
7 spending limit in any fiscal year. The spending limit for any
8 fiscal year shall be equal to the spending during the
9 immediately prior fiscal year, adjusted by 80% of the compound
10 annual rate of change for the two preceding years of the
11 personal income by place of residence for Pennsylvania as
12 defined and officially reported by the United States Department
13 of Commerce. The percentage of the rate of change used in any
14 fiscal year to adjust the limit may be increased for that year,
15 but not to a percentage in excess of 100%, by the affirmative
16 vote of two-thirds of the members elected to each House of the
17 General Assembly.
1 (b) The General Assembly shall within one year from the
2 effective date of this act enact legislation restricting the
3 annual growth in spending of each municipality and school
4 district to an appropriate economic index adjusted for
5 population growth and shall provide for changing such spending
6 limit by a majority vote of the electorate of said municipality
7 or school district.
8 (c) If the duty of paying any cost or any portion thereof
9 shall be transferred from one level or unit of government to
10 another the cost so transferred shall be deducted from the
11 spending limit of the transferor and shall be added to the
12 spending limit of the transferee.
13 (d) The Commonwealth shall not impose upon any unit of local
14 government new programs or increase levels of service under
15 existing programs unless the necessary cost thereof shall be
16 fully funded by this Commonwealth.
17 (e) The Commonwealth's spending limit as provided in
18 subsection (a) may be changed by the procedure outlined in
19 section 1(a) of Article XI of the Constitution of Pennsylvania.
20 (f) The spending limit of the Commonwealth may be exceeded
21 in any fiscal year for a presidentially declared emergency or
22 major disaster. The spending limit may also be exceeded for
23 other declared emergencies if the Governor so requests and the
24 General Assembly approves by the affirmative vote of two-thirds
25 of the members elected to each House. The excess spending
26 authorized by exceeding the limit in this manner shall not be
27 included in the computation base of the spending limit for any
28 subsequent fiscal year.
29 (g) Future liabilities resulting from the adoption of or
30 contracting for new or improved deferred compensation or
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1 benefits or pensions on or after the effective date of this act,
2 shall be fully funded each year in accordance with an accepted
3 advance funding actuarial method using actuarial assumptions and
4 asset valuation methods.
5 (h) Total spending by the Commonwealth means all
6 appropriations and authorizations from the General Fund, and
7 Motor License Fund and funds created after the effective date of
8 this act, and shall exclude refunds, servicing of bonded
9 indebtedness incurred prior to the effective date of this act
10 and of voter approved bonded indebtedness, expenditures for
11 funding the unfunded pension liabilities existing on the
12 effective date of this act, and the spending of Federal funds,
13 gifts or receipts restricted by laws in effect as of January 1,
14 1980. This section shall not be circumvented by creating
15 additional spending programs in, or transferring spending from
16 the General Fund or Motor License Fund to, existing special
17 funds or restricted receipt accounts.
18 (i) The Commonwealth shall not impose taxes or spend
19 revenues in excess of those imposed or spent during the fiscal
20 year next following the date on which this act is effective
21 until the legislation required by subsection (b) has been
22 enacted.
23 Section 2. Effective date.
24 This act shall take effect January 1, 1981.
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